London, UK, 5 March 2021

Basilea Pharmaceutica (BSLN): Derazantinib spearheads oncology portfolio

Basilea has successfully brought two anti-infective drugs to the market. Lead product Cresemba continues to benefit from ongoing launches by multiple partners including Astellas (US) and Pfizer (ex-US). Longer-term value creation is dependent on crystallising the mid-/late-stage oncology portfolio. Three ongoing Phase II trials (FIDES-01/02/03) will define lead R&D asset derazantinib's utility in intrahepatic cholangiocarcinoma (iCCA; bile duct cancer), urothelial cancer and gastric cancer. Lisavanbulin, a unique, internally developed asset, has progressed into a proof-of-concept Phase II biomarker-driven trial in recurrent glioblastoma (GBM) (interim results expected H221). Our forecast profitability in 2022 is dependent on the late-stage clinical development strategy for derazantinib and lisavanbulin. We value Basilea at CHF1.17bn or CHF99 per share.

Our valuation is CHF1.17bn or CHF99 per share, from CHF1.14bn or CHF106 per share. We have made minor adjustments to the model and increased the probability of success for lisavanbulin to 35% from 20%, and derazantinib to 50% from 40%, reflecting pipeline progression and encouraging data readouts. Our core underlying assumptions are unchanged. Our valuation reflects CHF77.9m net debt at 31 December 2020, excluding the gross CHF45.75m post-period capital raise.
 

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